TMTW # 78 – 2012 Standard Mileage Rates

Tax and Money Tip of the Week
IRS Announces 2012 Mileage Rates
 January 25, 2012 | No. 78

Not Much Changed from 2011
 

The 2012 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes are:
 
-55.5 cents per mile for business purposes
-23 cents per mile for medical or moving purposes
-14 cents per mile driven in service of charitable organizations
 
The rate for business miles driven is unchanged for the mid-year adjustment that became effective on July 1, 2011.  The medical and moving rate has been reduced by 0.5 cents per mile.  The charitable mileage rate is set by Congress and remains unchanged.
 
The depreciation component of the business mileage rate is 23 cents per mile.
 
The IRS determines the mileage rates based on an annual study of the costs of operating an automobile, including fuel prices, repair and maintenance costs, registration, etc.
 
Taxpayers always have the option of calculating the actual costs of using their vehicles rather than using the standard mileage rates.
 
However, you cannot use the standard mileage rates for business if you made the election to take a deprecation deduction in the year you placed the vehicle in service.
 
Regardless of which method you choose to deduct vehicle expenses, the IRS requires that you keep contemporaneous records to substantiate your deductions, like a mileage log. A properly maintained mileage log will contain such details as date and time, name and location of the destination and the purpose of the trip.
 
Stay safe while driving in 2012—and keep track of those miles!
 
  
  
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week

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